You Plan on Depositing $10,000 a Year in Real Terms

question 302

Multiple Choice

You plan on depositing $10,000 a year in real terms into your investment account for the next four years. The relevant nominal discount rate is 7.5% and the inflation rate is 4.2%. What are these
Deposits worth in today's dollars?

• A) $36,418.02
• B) $36,787.78
• C) $37,023.03
• D) $38,021.21
• E) $38,504.19

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Definitions:

Fixed Factory Overhead Volume Variance

This calculates the difference between the budgeted and actual volume of production, affecting the fixed overhead costs allocated to each unit of production.

Variable Factory Overhead Controllable Variance

The difference between the actual variable overhead costs and the budgeted costs controllable by management.

Variances

Differences between planned and actual performance in budgeting or costing.

Standard Costs

Predetermined or estimated expenses that are often used to measure the performance of manufacturing departments or operations.